The collapse of FTX and with it the crisis in the cryptocurrency sector has shaken many investors and prompted many to question whether it is worth investing in cryptocurrencies now that the sector is in crisis. Many others, on the other hand, believe that what we are experiencing these days is just yet another negative swing, of a highly volatile sector, and that sooner or later there will be a new surge.
The collapse of FTX triggered a series of chain reactions that affected the entire cryptocurrency sector and prompted many to question whether it still made sense to buy cryptocurrencies with the sector in crisis.
Some fear an end to the cryptocurrency era, while others look at this moment of crisis, the so-called “crypto winter”, as one of many negative swings that often proceed a sharp rise in the market value of certain cryptocurrencies. So is it still worth investing in cryptocurrency?
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Investing in cryptocurrency: volatility
What has emerged from this affair is the negative impact of the high volatility of cryptocurrencies, an element that, in recent years, has made the fortunes of many, and which, only on rare occasions, has caused huge losses for investors.
The peculiarity of this collapse in the value of cryptocurrencies lies in the period in which it occurred, namely the first weeks of September, a time of year when, traditionally, in recent years there has been a sharp rise in the value of cryptocurrencies as a result of what many call the ‘Halloween effect’.
That effect did not happen this year, leaving the many who had invested in cryptocurrencies hoping for strong rises, and those who had bought cryptocurrencies at very high prices, only to see the price of cryptocurrencies quickly collapse, resulting in huge losses.
Is it worth buying cryptocurrencies?
As mentioned above, many are wondering whether it is still worth buying cryptocurrencies, taking advantage of this time of crisis when the value of cryptocurrencies is low in order to be able to make a huge profit when the crisis is over, or whether, on the contrary, the crisis in the cryptocurrency sector is a definitive crisis, from which there will be no more rising.
Giving a clear-cut answer is not possible, only time will define whether we have reached the twilight of cryptocurrencies or whether there will soon be a new dawn.
What we do know, however, is that this is actually not the biggest crisis in the cryptocurrency industry.
There have been far deeper and more complex crises in past years, which brought the entire industry to its knees before it could rise again stronger than before.
What could happen in the future?
At the moment, there are many more cryptocurrency holders than in the past, and although the sector is in crisis, their numbers do not seem to be decreasing significantly.
There is no doubt that the collapse of FTX and the huge noise triggered by the news, has triggered a lot of mistrust, especially among new investors who have experienced huge losses, but at the same time, it has also opened a door for more persevering investors.
In all likelihood, the cryptocurrency sector has passed its absolute peak, it is very likely that Bitcoin, the most powerful of the cryptocurrencies, will never again return to be worth over $50,000, but at the same time it is highly unlikely that its value will return to pre-2021 levels.
According to many analysts, once the post-FTX settling is over, the cryptocurrency market will return to growth, albeit most likely more slowly than before, due to fewer investors, at least in the beginning.
According to other experts, on the other hand, the next growth phase, which could occur in early 2023, could attract new investors and fuel a new growth spiral, as has already happened on several occasions, when, after a few phases in which there were heavy losses in value, the value of the major cryptocurrencies rose exponentially.
Few believe that the current crisis in the crypto sector could mark the end of the cryptocurrency era.
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